A messy, cluttered house can be stressful, overwhelming, and even chaotic. So, it pretty much goes without saying that the same goes for your financial health. Disorganized bills and budgets are not only stressful, but they can actually also help drive you deeper into debt. Consumers with cluttered finances and sloppy financial recordkeeping are more likely to miss payment deadlines, rack up fees, save less, and continue poor spending habits. Make it a priority to organize your financial records and take the time necessary to take control of your future.

Follow along on the blog to discover seven tips that can help you keep your financial house in order.

1. Take Inventory 

Keep Track of Your Paper Financial Documents: Financial documents are extremely important but can easily be misplaced. Good financial recordkeeping starts with understanding clearly where you are right now. You can avoid losing documents by creating a dedicated financial file or binder where all your relevant documents are kept. This is also helpful for your beneficiaries in the case of an accident or passing, as all of the information they need will be in one designated place.

When gathering your documents, pull together any records related to your household finances. This includes account numbers, passwords, and other pertinent information that’s needed to access records. You should also collect information on payments you make on a yearly or monthly basis such as life insurance policies, mortgages, and utility bills.

Gather Your Digital Financial Documents: As our dependence on the digital world grows day by day, some people choose to opt-out of paper documents altogether. Make sure all of your information is accessible in one easy-to-find location. Rather than keeping them on your computer, consider using a hard drive that can be kept in a safe or lockbox.

Having some documents online and some on paper isn’t ideal and can make it harder to keep track of everything. If this is the case, consider scanning your paper documents into a digital file and later shredding them to eliminate paper storage. If you’re more of a digital file person, consider having a digital backup on an external hard drive in case there’s ever an issue with information stored in the cloud or on your computer.

2. Track Expenses and Utilize Bill Pay

The key to getting organized is having a system in place to pay all of your bills. Keep track of your bills and stay organized by creating a spreadsheet or document that shows monthly or annual due dates for all your bills or keep your physical documents in a filing cabinet or in stackable drawers. Whatever method you decide to use to keep track of your expenses and bills, be sure that it’s something you’re able to keep up with consistently and for the long haul.

Many financial institutions offer bill-paying services that are set up to automatically withdraw payments from your account. However, this isn’t a completely “hands-off” method. You need to ensure your bank accounts always have enough money in them to cover the scheduled withdrawals. It’s a good idea to keep an additional cushion of funds in your account to avoid any unexpected fees or charges.

If you prefer to handle all bill payments yourself, set aside a day and time each month dedicated to paying your bills and organizing your financial records. A structured schedule will help you stay on top of all deadlines ensuring that you’ll never miss a payment. If you decide to go the manual route, remember to allow time for mail delivery and possible delays.

One of the most challenging aspects of managing finances is keeping track of due dates for various bills. This can be especially true for annual subscriptions or bills you don’t see on a regular basis. Some recent research shows the average American is likely to have at least seven or more bills per month. These payments can be due on different dates throughout the month. Not being organized can cost you extra money in fees or penalties. And if you’re not careful, you may even miss due dates. Late payments can negatively affect your credit score if made 30 or more days after the due date and can show up on your credit report for 7 years. Not actively managing your payments and keeping an eye on your credit can make it harder to qualify for competitive loan rates and mortgages in the future.

To cut down on the risk of making a late payment—or worse, forgetting to make the payment at all—establish an effective and automated bill pay system. You can go online and set up one-time, recurring, or future payments. Setting up automatic bill pay can be very beneficial for both your sanity and your credit. Your credit card payment history alone accounts for 35% of your FICO credit score. While this makes the biggest impact, other missed payments can be detrimental as well.

3. Get a Handle on Debt

To get a better idea of where you stand with debt, make a list of all the people or institutions you owe money to. Although it’s a simple step, this can make a big difference in visualizing the big picture of your financial situation. Part of organizing your finances is understanding exactly where you stand.

Once you’ve identified your debts, make a plan for repaying them. You can do this by starting with the smallest loan you’ve got and working on paying it off or focusing on the loan with the highest interest rate first.

4. Check Your Credit History

Credit can have a major impact on your life—now and in the future. Make it a habit to check your credit report on an annual basis so you can better understand credit and what’s being collected by all 3 credit bureaus (Equifax, Experian, and TransUnion). Regularly checking your report can also help you spot fraud—a problem on the rise across the globe. It can also help as you make a plan for the future if you notice your score is dropping or is lower than you expected.

Have you ever wondered why credit matters? Understanding your credit is much easier than you may think. Paying attention to it and building it with purpose has its benefits. Your credit can help with everything from buying a car, a house, or even getting a job. That little three-digit number can be important as you establish a solid financial foundation for yourself and your family.

A good credit score can put you on a productive path and present you with better opportunities compared to someone that has less than stellar credit. Your credit score is a snapshot of how you handle your money; the higher it is, the more likely a lender is to want to do business with you. Plus, with a good credit score, you’ll often be approved faster and be presented with lower interest rates and better loan terms.

5. Assess Your Goals

Setting financial goals is important as you work to become more financially secure. When working to organize your finances, it helps to know where you’re headed.

Start by asking yourself what your goals are. Is there something you hope to achieve financially in the near future like buying a car, a new home, or to pay down high interest debt? Or are you saving for a dream vacation or wedding? Whatever you’re saving for, it helps to have a concrete plan in place so you can see your progress every step of the way, which will increase the likelihood of you achieving your goals. You’ll want to track and document how much money you’ve got coming in and how much you’ve got going out. This will help you to identify and adjust your monthly spending habits in order to meet your financial goals.

Once your goals are set, the process doesn’t end there. This isn’t something you just create and never look at again. It’s much bigger than that and takes hard work and commitment. Part of staying financially organized is staying on top of financial recordkeeping and regularly assessing your progress and making adjustments along the way.

Setting and reaching short- and long-term money goals can give you a confidence boost and solid foundational knowledge to achieve larger goals. What would you like to accomplish in the next year, five years, or even ten years? Anything is possible, but it all begins with setting goals and following through. Make your financial health a priority the same way you should for your physical well-being.

6. Explore Financial Apps

We all live in a world where technology dominates many aspects of our lives. If you want to get something done in life, there’s likely an app that can help. The same is true for organizing your personal finances. There are certainly plenty of finance apps where you can organize your financial documents and income, create budgets, and track spending.

The best financial apps give you maximum control over your money and are flexible enough to adapt to you and your personal goals. It’s best to do your research to find out which apps will work best for your personal financial situation. Before signing up for any account, you also should be aware of fees for using the service and have securities in place to protect your money.

7. Schedule Regular Financial Housekeeping

Organizing your financial documents takes planning and action. To be effective, you have to resist thinking of it as a “one and done” scenario. Even after pulling everything together, you have to continually review and adjust your plans to stay on top of things.

Take care of the seemingly little things, too. For instance, if you’ve got piles of personal, confidential documents stacking up, set it aside for a future shred event at your financial institution. GOLD hosts four free shred events each year to help you safely dispose of your personal documents! Plus, it’ll help you significantly cut down on clutter and eliminate paper waste.

It’s also good to set a recurring date to perform a “financial check-up” to help you stay organized and on top of your financial picture. But when should you do this? That part is completely up to you—you’ve got to do whatever fits your personal schedule and lifestyle and financial situation. To avoid forgetting to do these check-ins, mark them in your personal planner or calendar or set reminders on your phone.

Get a Free Financial Counseling Session from GreenPath

Staying organized and in-tune with your finances will help tremendously when it comes to managing your financial health. If you need help creating a budget, understanding your credit, or organizing your finances, contact our friends at GreenPath to help. They offer initial free financial counseling sessions with certified counselors who lend an empathetic ear, look at your entire financial picture, and help you develop a personalized plan that works for you and your particular situation. They’ll be there to help you manage your financial health, reduce financial stress, and keep you on track for a bright future.

GreenPath Financial Wellness

GreenPath Financial Wellness

Our partner, GreenPath Financial Wellness, provided this blog content. GreenPath is a national non-profit organization whose mission is to empower people to take charge of their financial futures. As a Member of GOLD, you have access to GreenPath’s educational tools and resources that are geared to help you along your journey of reaching financial success. 

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